Summary
This 8-K/A filing by ONEOK, Inc. (OKE) primarily serves as an amendment to previous filings concerning management changes. The key update for investors is the execution of an Amended and Restated Termination Agreement with John W. Gibson, effective December 21, 2006. While the core terms of his severance remain similar to his previous agreement, a significant new provision mandates that the company will provide gross-up payments to Mr. Gibson to cover any excise taxes on 'excess parachute payments' related to his severance. This agreement outlines specific conditions under which Mr. Gibson would be entitled to severance, namely termination by the company without "just cause" or by him for "good reason" within three years following a change in control. The severance package includes a lump sum payment based on a multiple of his annual compensation, pro-rata short-term incentive compensation, accelerated vesting of retirement and other benefits, and continued welfare benefits. Investors should note the potential financial implications of these gross-up provisions for the company in the event of a change in control and subsequent termination.
Key Highlights
- 1ONEOK, Inc. filed an 8-K/A to amend previous filings regarding director elections and committee assignments.
- 2The primary focus of this amendment is the Amended and Restated Termination Agreement with John W. Gibson, effective December 21, 2006.
- 3A new provision in Mr. Gibson's termination agreement includes company gross-up payments to cover excise taxes on excess parachute payments.
- 4Severance payments and benefits are contingent on termination by the company without 'just cause' or by Mr. Gibson for 'good reason'.
- 5The termination trigger is applicable within three years following a change in control of ONEOK, Inc.
- 6Severance includes a lump sum payment (multiple of annual compensation), prorated incentive compensation, accelerated vesting of benefits, and continued welfare benefits.
- 7The filing also references the prior election of John W. Gibson and David J. Tippeconnic to the Board of Directors and Mr. Tippeconnic's committee assignments.